What is workers' compensation insurance?

I own a small business in Tennessee. I currently have no employees, but my business is growing and I’m thinking of hiring several full-time workers. What is workers’ compensation insurance? Do I need to have workers’ compensation insurance in Tennessee? 


Thousands of workplace injuries occur in Tennessee each year. Most injuries are minor, like sprained ankles from slip-and-fall injuries. But serious injuries like lost limbs and even deaths related to industrial accidents also happen. 

As a business owner, you’re responsible for helping your employees get the care they need if they’re injured on the job. The costs related to workplace injuries, whether from numerous small injuries or one serious incident, can be devastating for any size business in Tennessee. That’s where workers’ compensation insurance comes in.

What Is Workers compensation Designed to Protect in Tennessee?

A: Workers’ compensation insurance in Tennessee protects employees who are injured on the job regardless of who is at fault. With workers’ compensation insurance, employees receive income replacement and medical benefits if they sustain a work-related illness or injury. 

Workers’ compensation insurance also protects employers from the possibility of lawsuits that arise from employee injuries. 

What are the benefits of having workers' compensation insurance in Tennessee?

A: Workers’ compensation insurance is more than just another expense, it is an affordable means of protecting both you and your employees. 

With workers’ compensation insurance in Tennessee, employees receive the peace of mind of knowing that they can recover from an injury without the additional emotional and financial stress of fighting their employer for help with medical bills and lost wages. In addition, you are able to significantly reduce the likelihood that an injured employee will sue you for damages. 

Do I really need workers' compensation insurance in Tennessee?

A: Workers’ compensation insurance is required by law in Tennessee, so there’s really no way around it. 

In Tennessee, all employers in the construction or coal mining fields, and all other employers who have at least five full- or part-time workers, must cover their employees with workers' compensation insurance. It is not necessary to purchase coverage for sole proprietors, LLC members, corporate officers, or partners. However, you do have the option to do so if you wish.

Who Counts As An Employee in Tennessee?

A: Corporate officers and family members who meet the definition of “employee” are included in the count towards the total, regardless of whether or not the officer(s) elects to decline coverage.

What If You Fail to Provide Workers Compensation in Tennessee? 

A: Tennessee employers who do not provide workers’ compensation insurance as required may face fines and other penalties for non-compliance.

Author | Ann Herro

Article Reviewed by | Paul Martin


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